Monmouth County Tax Assessment Demonstration Program: Understanding the Basics

check book.jpgOur office previously reported on the changes in how Monmouth County’s tax appeals are scheduled. In order to ensure that all County Tax Appeals are heard and resolved prior to the finalization of municipal budgets, Monmouth County had implemented a new calendar that requires tax appeals to be filed by January 15. In this week’s article, we will highlight an additional change in Monmouth County’s approach to tax assessments.

During the past few weeks, our office has fielded hundreds of phone calls from taxpayers who are concerned that their assessments have been dramatically raised. Their first question is “why is my assessment being raised, when the property has not increased in value?” I need to explain that, in some cases, the town previously had all of the properties assessed at a percentage of true value and now that the town is being re-assessed, all properties are (ostensibly) going to be re-assessed at 100% of true value.

In other cases, where the town was already assessed at full market value, there are still several properties, which for variety of reasons, under-assessed. Therefore, the fact that your assessment has increased substantially is not in itself a reason for appeal. Rather, we need to look at the new assessment and determine whether it exceeds the fair market value.

The next question taxpayers have is “why is this re-assessment happening in every town?” To answer this question, we need to review the “Annual Assessment Revision” clause of the new program. The program provides the tax assessor with both the authority and the requirement for the annual review and revision of all properties within the municipality. The intention in this case is to create increased accuracy of assessments and to reduce exposure for revenue losses due to appeals.

Since Monmouth County is the first to implement this program, it is uncertain whether the program will be a success. It is, however, certain, that in these initial few years, there will be an inordinate number of tax appeals filed by taxpayers who are dissatisfied with their “starting point.” We need to caution potential clients, however, that their new assessments should only be appealed if they exceed the market value of the property.

Finally, for taxpayers who recently won a tax appeal within the last 2 years and are wondering why the “freeze act” does not protect their old assessments, the answer is that the freeze act does not apply to any town that has undergone a municipal-wide revaluation or re-assessment. Put simply, the Freeze Act does not protect any prior assessments in Monmouth County. Furthermore, we note that a wholesale increase in municipal assessments generally will not cause a substantial increase in taxes, since the tax rates would also be adjusted accordingly.

While the new program is designed to standardize and create a unilateral result throughout Monmouth County, the unfortunate fact is that not all assessors have equal ability to accurately and reliably determine property values. So far this year, the majority of our tax appeals have come from the towns of Marlboro, Middletown and Holmdel. For more information on tax assessments and tax appeals, please feel free to contact our office.